Addams, Inc., is preparing its master budget for the second quarter. The following sales and production data have been forecasted:?AprilMayJuneJulyAugustUnit sales ……400500520480540Finished goods inventory on March 31: 120 unitsRaw materials inventory on March 31: 450 poundsDesired ending inventory each month:Finished goods: 30% of next month's salesRaw materials: 25% of next month's production needsNumber of pounds of raw material required per finished unit: 4 lbs.How many pounds of raw materials should be purchased in April?
What will be an ideal response?
? | April | ? | May | ? |
| Budgeted sales units ……………………………… | 400 | ? | 500 | ? |
| Desired finished goods ending inventory (30% ? 500; 30% ? 520) ………………………………… | 150 | ? | 156 | ? |
| Total ……………………………………………… | 550 | ? | 656 | ? |
| Less: Beginning finished goods inventory …….… | (120) | ? | (150) | ? |
| Budgeted units to be produced…………………… | 430 | ? | 506 | ? |
| Raw material units per finished unit ……………… | x 4 | ? | x 4 | ? |
| Materials needed for production ………………… | 1,720 | lbs. | 2,024 | lbs. |
| Desired raw material ending inventory (25% ? 2,024) | 506 | lbs. | ? | ? |
| Total needs ……………………………………… | 2,226 | lbs. | ? | ? |
| Less: Beginning raw materials inventory …………. | (450) | lbs. | ? | ? |
| Purchases ………………………………………… | 1,776 | lbs. | ? | ? |
Business
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